Case Study – Florida versus Maker’s Mark

Sometimes a lesson in effective branding comes along and it is hard to not take notice. Recently, two brands I love faced similar challenges and made different choices on how to respond. I believe one got it right, and one may not have.

The purpose of this post is twofold. First, to illustrate that as economic development professionals we can learn a lot about branding our communities by studying and reapplying the principles used in the private sector. That is one of the foundational tenets of this website. Second, I would really like to know what your reaction is to these two different approaches to essentially the same challenge.

Makers Mark

In the spirit of full disclosure, I am a Maker’s Mark Ambassador and my favorite bourbon drink is a Marker’s on the rocks. In fact, I am sipping one while writing this post.

The folks at Maker’s Mark did a poor job forecasting sales. Ina business where product ages in the barrel for 5.75 to 6.5 years, under forecasting demand can be extremely problematic.

Marker’s Mark bourbon is bottled at 90 proof (45%) alcohol. One way to stretch a limited supply of drinking ready product is to add water (effectively reducing the alcohol content).

Over the February 9 – 10, 2013 weekend, Maker’s Mark announced a 3% alcohol per batch reduction to stretch their supply and meet the faster than planned demand for their brand.

The Company conducted market research to determine if taste was affected. Consumers and in-house experts involved in the taste test concluded there was no noticeable impact on taste.

“The distillery made up different batches that Rob and I tested every evening over the course of a month. Every batch at 42% ABV (versus the formula specification of 45% ABV) had the same taste profile that we’ve always had,” said Bill Samuels Jr..

[Parenthetical thought – I know, it is a tough job, but somebody’s got to do it.]

As soon as word of the decision got out, on February 11^th at 10:05AM Matthew Yglesias published a blog post entitled “The Economics of Watering Down Maker’s Mark”. He questioned the business sense of watering down the bourbon rather than raising the price. He said “If you can alter the formula that much without people caring, you’re just saying your customers aren’t really paying attention to the flavor of the drink.”

On February 17^th, Makers’s Mark decided to listen to their consumers and reversed their decision to dilute their burbon. The media applauded the decision.

The Company issues an email to its Ambassadors explaining their decision. Here is the content of the email I received.

Dear Ambassador,

Since we announced our decision last week to reduce the alcohol content (ABV) of Maker’s Mark in response to supply constraints, we have heard many concerns and questions from our ambassadors and brand fans. We’re humbled by your overwhelming response and passion for Maker’s Mark. While we thought we were doing what’s right, this is your brand – and you told us in large numbers to change our decision.

You spoke. We listened. And we’re sincerely sorry we let you down.

So effective immediately, we are reversing our decision to lower the ABV of Maker’s Mark, and resuming production at 45% alcohol by volume (90 proof). Just like we’ve made it since the very beginning.

The unanticipated dramatic growth rate of Maker’s Mark is a good problem to have, and we appreciate some of you telling us you’d even put up with occasional shortages. We promise we’ll deal with them as best we can, as we work to expand capacity at the distillery.

Your trust, loyalty and passion are what’s most important. We realize we can’t lose sight of that. Thanks for your honesty and for reminding us what makes Maker’s Mark, and its fans, so special.

We’ll set about getting back to bottling the handcrafted bourbon that our father/grandfather, Bill Samuels, Sr. created. Same recipe. Same production process. Same product.

As always, we will continue to let you know first about developments at the distillery. In the meantime please keep telling us what’s on your mind and come down and visit us at the distillery. It means a lot to us.

Sincerely,

Rob Samuels, Chief Operating Officer

Bill Samuels, Jr., Chairman Emeritus

Enterprise Florida

In the spirit of full disclosure, I have visited Florida and had a great time. I also posted on this story when the news was first broke.

The folks at Enterprise Florida made a strategic decision to strengthen the state’s brand within the business community as a way to generate increased capital investment. They did market research to try and uncover insights into what the current impression of Florida was in the business community, and used the results of that research to guide creation of a new logo and tagline.

Governor Rick Scott unveiled the new logo and tagline in Tallahasee. He explained “We’re working aggressively to get businesses to Florida, so Florida families have more opportunities to pursue the American Dream.”

[Parenthetical thought – If you want to see where Florida ranks nationally in enabling people who live there to achieve the American Dream, simply click HERE.]

It was reported that Enterprise Florida sought $3 million from the state and $1.5 million from private donations to underwrite the campaign.

On February 5^th, Kate Stanton raised the question of whether Florida’s logo was sexist in her blog post. Other groups jumped in on the discussion. Pamela Rogan, president of the Central Florida Chapter of the National Association of Women Business Owners, said “I thought immediately that it set us back.”

The negative backlash made national news, and like Maker’s Mark, Enterprise Florida’s Management was faced with a difficult challenge.

But, unlike the folks at Maker’s Mark, leadership at Enterprise Florida decided to minimize the objections and press on with their planned course of action.

Enterprise Florida’s Chief Marketing Officer said “We’re going to move forward with this campaign.” “The tie is iconic to mean business, it has nothing to do with gender roles. It’s just a cartoon.”

Discussion

Clearly, the response of Marker’s Mark and Enterprise Florida to criticism from their customer base was diametrically opposite. In the case of Maker’s Mark it was mea culpa, we care about what you think. In the case of Enterprise Florida, I think the phrase “It is just a cartoon” summarizes their response.  Both had market research results they felt supported their initial decisions.

What can we learn from these two cases? What are the risks in each response? Which response do you believe will build brand equity and why? Please leave a comment with your thoughts.

Where Does Your State Rank in Enabling People Who Live There To Achieve The American Dream?

To view the complete set of State rankings based on the ADCI and five explanatory sub-indexes, simply click this button

For additional information on the ADCI click HERE.